Q:1-An economy that experiences the law of increasing costs and shifts resources from automobile production to computer production in order to increase computer output by fixed increments must:
Mark one answer:
be inefficient.
be shrinking, be growing.
operate beyond its production possibilities curve in the impossibilities region.
give up increasing amounts of automobiles.

Q:6-Which of the following is assumed when setting up a production possibilities frontier?
Mark one answer:
Technology is fixed.
Only two products are produced.
Resources supplies are fixed.
All of these assumed when seeting up a production possibilities forever.

Q:7-Which of the following terms means the highest valued alternative given up when a person chooses to engage in an activity?
Mark one answer:
Dollar Cost.
opportunity cost.
Accounting Cost.
none of these.

Q:8-Which of the following best describes the principle of opportunity cost?
Mark one answer:
In a market economy taking advantage of profitable opportunities involves some money cost.
The Cost of production varies depending on the opportunity for technological application.
The economic cost of using a factor of production is the alternative use of that factor that is given up.
Taking advantage of investment opportunities involves costs.

Q:9-if the production possibilities frontier is graphed as a straight line what does this mean?
Mark one answer:
Nothing there is no significance of a straight line production possibilities frontier.
It is easy to efficiently produce output.
Opportunity costs are constant as production shifts from one produc to the other.
Opportunity costs are increasing as production ahifts from one product to the other.

Q:10-Which of the following is not a non-tariff barrier?
Mark one answer:
A quota on apparel.
A tax equal to 12% of value on imported oil.
A voluntary export restraint on cars.
A regulation requiring government agencies to favor domestically producers.